As much as we like to think of the forex market as the be all
and end all of financial trading markets, it doesn’t exist in a
vacuum. You may even have heard of some these other mar-
kets: gold, oil, stocks, and bonds.
There’s a fair amount of noise and misinformation about the
supposed interrelationship among these markets and curren-
cies or individual currency pairs. To be sure, you can always
find a correlation between two different markets over some
period of time, even if it’s only zero (meaning, the two mar-
kets aren’t correlated at all).
Always keep in mind that all the various financial markets are
markets in their own right and function according to their
own internal dynamics based on data, news, positioning, and
sentiment. Will markets occasionally overlap and display
varying degrees of correlation? Of course, and it’s always
important to be aware of what’s going on in other financial
markets. But it’s also essential to view each market in its own
perspective and to trade each market individually.
Let’s look at some of the other key financial markets and see
what conclusions we can draw for currency trading.
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